No. 850Delivered June 24, 2004 August 24, 2004

• Most people today do not really knowwhat is in their health plans, and manytimes they do not even know what isbeing paid for—particularly when it comesto issues regarding abortion.

• In the interest of freedom, policymakersshould oppose personal mandates; reformMedicaid and other government insuranceprograms; and enact parental consent laws.

• A change in the insurance market, coupledwith changes in the tax code and theestablishment of equity in health careoptions, could revive faith-based institu-tions providing health care benefits andfaith-based health care delivery.

• Persons should be free to join plans thatrespect their ethical, moral, or religiousvalues.

Talking Points

This paper, in its entirety, can be found at: www.heritage.org/research/healthcare/hl850.cfm

Produced by the Center for Health Policy Studiesand the Centre for New Black Leadership

Published by The Heritage Foundation214 Massachusetts Avenue, NEWashington, D.C. 20002–4999(202) 546-4400 • heritage.org

Why It’s Time for Faith-Based Health Plans

Phyllis Berry Myers, Richard Swenson, M.D.,Michael O’Dea, and Robert E. Moffit, Ph.D.

PHYLLIS BERRY MYERS: Good afternoon. I amPhyllis Berry Myers, Executive Director of the Centrefor New Black Leadership. Thank you for joining us.Our presenters will be Dr. Richard Swenson, Mr.Michael O’Dea, and Dr. Robert Moffit.

Dr. Swenson received his M.D. from the Universityof Illinois School of Medicine. He is currently aresearcher, author, and educator. As a physician, hisfocus is cultural medicine, researching the intersectionof health and culture. As a futurist, his emphasis isfour fold: the future of the world system, society, faith,and health care. He is the author of six books, includ-ing the bestsellers, Margin: Restoring Emotional, Physi-cal, Financial, and Time Reserves to Overloaded Lives andThe Overload Syndrome. He has written and presentedwidely, including both national and international set-tings. He is a frequent guest on Focus on the FamilyRadio, and his programs are some of Focus’s most pop-ular broadcasts. In 2003, Dr. Swenson was awardedthe Educator of the Year Award by the Christian Medi-cal and Dental Associations. Dr. Swenson and his wife,Linda, live in Menomonie, Wisconsin.

Michael O’Dea is founder and Executive Directorof the Christus Medicus Foundation, a not-for-profitorganization focused on reclaiming Christ-centeredhealth care by reforming corporate and public policyto allow God’s people a conscientious choice inselecting health insurance. Mr. O’Dea was formerlypresident and CEO of the Value Sure Corporation, aunique management resource and benefits consultingfirm specializing in pro-life health care. Mr. O’Dea is

Nothing written here is to be construed as necessarily reflect-ing the views of The Heritage Foundation or as an attempt to

aid or hinder the passage of any bill before Congress.

No. 850 Delivered June 24, 2004

an MBA graduate from the University of Detroit.He entered the United States Army in 1967 as aprivate, attended officer candidate school, and wascommissioned in 1968. He served in Vietnam,where he was awarded the Bronze Star.

Dr. Robert Moffit is the Director of The HeritageFoundation’s Center for Health Policy Studies. Heis a 25-year veteran of Washington policymaking,a former senior official at both the U.S. Depart-ment of Health and Human Services and the Officeof Personnel Management (under PresidentRonald Reagan). He specializes in Medicarereform, health insurance, and other health policyissues. Bob received his B.A. in political sciencefrom LaSalle University in Philadelphia and hisPh.D. from the University of Arizona.

DR. RICHARD SWENSON: Our health care sys-tem is changing in historically unprecedented ways.This is not new to many of us. The dominantchange is out-of-control health care costs. There areprobably 20 systemic problems that we are facingright now. Our health care system is the best thathistory has ever seen, but it is besieged by problems.

Most prominently, our system is besieged byincreasingly higher costs. Currently, we are paying$1.6 trillion. We are adding $120 billion per yearto the health care bill. This is unsustainable. Fed-eral authorities predict that by the year 2012 it willreach $3.1 trillion. However, it will not, because itcannot. It is impossible, and something is going tohappen between now and then.

The cost curve approximates an exponentialcurve. Very seldom do peoples’ intuitive abilitiespenetrate these exponential cost increases. A phys-icist once said, “The greatest shortcoming of thehuman race is their inability to understand theexponential function.” Now, I would say there areother shortcomings of the human race that exceedthat, but, nevertheless, most ordinary people donot understand vertical curves. They are very dra-matic and they are very sudden.

Why is the cost of health care going up? Let mesummarize it this way: There are more and morepeople living longer and longer with more and morechronic diseases, taking more and more medications

that are more and more expensive, using more andmore technology with higher and higher expectations,in the context of more and more attorneys. All theconvergences are simultaneous and the math isexponential. If you do the math, you will see thatnothing is self-correcting.

Much of the rising cost that you see is attributedto the success of our health care delivery system.Let’s look at the components of this:

• There are more and more people. That is not nec-essarily bad; that is good. Some of my bestfriends are people.

• People are living longer and longer. That is good,too. Two thousand years ago, the average lifeexpectancy was 21 years. In 1900, it was 47years. Now it is 77 years. That is an exponen-tial curve. It also represents a success of ourhealth care system.

• There are more and more chronic diseases. Onehundred million Americans have some kind ofchronic disease. People used to die of these dis-eases. They do not die of these conditions any-more, largely because of our health care system.

• People are taking more and more medications.New medicines are very expensive, but they dokeep people alive. They get them out of thehospital sooner and they keep them fromneeding to go into the hospital.

• People have higher and higher expectations. Ourhigher and higher expectations are somethingthat we probably need to do something about.Yet we have them.

• We have more and more attorneys. In terms ofattorneys, litigation, and medical malpractice,the American Medical Association says that itslargest legislative priority is the 19 states thatare right now in crisis of existing medical mal-practice laws: 25 additional states are poisedon the brink of crisis.

A New Consumer-Choice ModelWe will hit a tipping point, probably sooner rath-

er than later. When that happens, we are eithergoing to go to a single-payer health care system ordo “something else.” Single payer is politically diffi-

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cult for many reasons. It is a possibility, but I wouldsay it is politically difficult. It is not optimal. “Some-thing else” is optimal, and not as politically difficult.

The “something else” is what I would like to see.I believe that the “something else” model is thefaith-friendly model—a private-sector, consumer-choice, defined-contribution model. I believe thatour health care future will be, and can be, faithfriendly. The opposite is not as faith friendly.

What are the rationales and predicted beneficialeffects of this consumer-based model? First of all,we have history. We have a long history of churchesand religious organizations that date back millenniain terms of health care—starting hospitals, medicalschools, clinics, and missions across the world help-ing the needy, the infirm, the elderly, and the sick.

This model also promises superior performance.Peter Drucker, the nationally renowned manage-ment expert, makes the case that the volunteersector—there are 2 million volunteer agencies inthe United States today, including faith-basedorganizations—has a track record that works. Itexceeds the track record of the public sector (gov-ernment) or the private sector (business).

Equally important, the relationship betweenvoluntary faith-based health plans and the deliverysystems is, and should be, a natural development.Faith equals health. There are now over 1,000studies that investigate the link between faith andhealth. Almost all show a positive association.Therefore, one could make the case that faithequals health. This is not rote, once-a-year faith,but intrinsically meaningful faith that translatesinto good health benefits. The savings may bearound 25 percent. I once asked the late Dr. DavidLarson about this, and he said it was possibly ashigh as 75 percent. I would never go that high,but, nevertheless, we could see real savings there.

Pre-existent Natural SynergiesLet me spend some time on the pre-existent nat-

ural synergies between the mission of faith and theneeds of a health care system.

• First, churches are a center of community.Maybe they are the last remaining centers ofcommunity in America. You need a tradition

that stretches into the past with durable, stablerelationships in the present and a shared visionfor the future. Churches have that.

• Second, churches are already helping the ill.Already you have parish nurses. Manychurches have been experimenting with thisconcept. You also have church assistance withhospital visits or post-surgical care. Sadie, whois 85 years old, needs cataract surgery, and herextended family is 1,000 miles away. She justcomes and stays at our house for two days.Churches do it all the time.

• Third, faith-based organizations can providemeals during sickness, respite care, retirementhomes, assisted living, nursing homes, hospicefor the dying, prescription plans, prayer, andcredibility. They also provide care for the poorand even help for the uninsured. It goes onand on and on.

• Finally, they also offer dependable and securebioethical standards. We will be talking aboutthat today.

The Single-Payer Health Care ModelLet’s look at the predicted adverse effects of a

single-payer system on both faith and freedom. Idon’t want to be too one-sided about this and saythat a single-payer system would be automaticallyhostile to issues of faith. Yet I do believe there isenough of both theoretical and practical evidenceto suggest that it would be very problematic.

First of all, we are a wildly pluralistic society. Ido not believe we used to be as pluralistic in thepast, but we clearly are today. This has profoundconsequences. The cultural and moral polarizationthat we see today is actually quite extreme. Mean-while, we are poised on the threshold of a wholehost of ethical conundrums that are going to hit usall very soon—within the next 10 years.

Here is a question for Congress and federal poli-cymakers. Why in the world would the federalgovernment want to set itself up as the arbiter ofthese inescapable ethical decisions, knowing thatno matter what decisions they make, they aregoing to alienate certain large segments of theirconstituencies?

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Some of the decisions that a single-payer systemwould require would certainly violate the tenets ofone faith tradition or another. Certainly, I wouldexpect that many of my most deeply held faithbeliefs and doctrines would be violated by such amonolithic structure.

Consider Roe v. Wade and its aftermath. It hasbeen suggested by some commentators—PeggyNoonan most recently—that perhaps our “culturewars” started in 1973 with Roe v. Wade. The publicpolicy debate on abortion then was not takingplace on the cultural level (leaving years to beworked out through public debate and discus-sion); instead, it was imposed.

Would you want Roe v. Wade 20 times over?That is what I am suggesting we would be facingin a government-run health care system.

The Bio-Ethical ChallengeWe have already touched on abortion. Yet partial

birth abortion to me supercedes any other ethicalmarker. It does not need to go any further than that.As a physician, I have delivered many babies. Whatdoes partial birth abortion entail? This may be anine-month baby, totally healthy. Yet the abortionistholds the head in the cervix, and he punctures theskull and sucks the brains out. However, we cannotdecide as a nation today that this is morally wrong.

That tells me something about where we are as anation today with regard to making moral deci-sions. I am not sure that I really want to trust allthe other upcoming major moral decisions to anational governmental health system that cannotmake a judgment on this one.

Just consider some of the other issues:

• Assisted Suicide. Oregon is the only state inwhich assisted suicide is legalized right now.Just recently, you saw the courts overturn theJustice Department’s objection to this practice.The Justice Department was saying, “No, thedoctors there cannot use medicines to kill theirpatients.” It will not be long. Other states willfollow Oregon.

• The Challenge of the Elderly. What are we todo with the elderly? We face a whole set of newchallenges, particularly in dealing with the eld-

erly. Financing and delivery of care for thegrowing number of elderly is already a very dif-ficult issue. Thus far, it has not been solved in asocially or fiscally stable manner. Yet in thefuture, we are going to have our grandmotherstaking care of their grandmothers. We are goingto have super-longevity. By the year 2030, weare going to have a doubling of the seniors, andeach senior is going to be spending twice asmuch in Medicare dollars as he or she doestoday. Those are real dollars. In other words, by2030, we will have four times as much spend-ing. Given such economic pressures, assistedsuicide is going to happen, but not in my healthcare system—not in the one that I want to join.

• Stem Cell Research. Stem cell research hasbeen in the front of the news for a long time. Itis very difficult for us to make a decision aboutthat. There are some ways to explore embry-onic versus adult stem cell research. If we doadult research, and we use non-federal spend-ing, then we could pursue a lot of work andperhaps make some real progress in an ethicalway. Yet many politicians want the federalspending and they want that funding forembryonic research.

• Prenatal Screening. There are 35,000 genes inthe human genome. We now can get portionsof the baby’s genetic imprint by chorionic vil-lus sampling done between eight and twelveweeks of gestation. We have also found ways ofmaximizing the recovery of fetal DNA in themother’s bloodstream. In addition, very sensi-tive sonograms can now tell us things aboutthat fetus at eight to 12 weeks.

Consider: There are 4,000 single-gene inheriteddefects. Out of 35,000 genes, there are 4,000diseases that are defective in only one gene.They are, for example, cystic fibrosis, Tay-Sachsdisease, Duchenne’s muscular dystrophy, andsickle cell anemia—just to name a few.

If you are going to get a gene imprint of thatbaby at eight or 10 weeks, and you have a fed-eral system with some rationing in place, andyou find out that this child has a gene thatwould predispose her for Alzheimer’s or prema-

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ture coronary vascular disease or breast cancer,the government officials might tell you, “Well,you can go ahead and have the baby. We are notsaying that you cannot have the baby, but wewould have to exempt this baby from our gov-ernment insurance program because it is goingto be very expensive. As a nation, we cannotfoot that bill.” That would be a very difficult sit-uation. It is not unlikely. On the front page ofthe June 20 edition of The New York Times,reporter Amy Harmon writes about the “agoniz-ing” personal choices that result from findingfetal defects through early genetic screening.

• Pre-Implantation Genetic Diagnosis. Maybethere has been a genetic problem in the family.Therefore, what they do is take eggs from themother and sperm from the father. They createmaybe eight embryos in a Petri dish. Then theydo genetic testing on all of those and find outwhich ones to implant. If that is to avoidgenetic problems, maybe that is one rationale.Yet what if they are starting to look for genes forI.Q. or genes for athletic performance or genesfor eye color? This is getting into eugenics.

• Human Genome Project. The HumanGenome Project has been a spectacular successin so many ways. Dr. Francis Collins said thisresearch should not, however, be used for clon-ing or for trait optimization. Yet, obviously, atsome point, it will be used for cloning and traitoptimization. In a recent issue of The Futuristmagazine, authors speculate: “What parent isnot going to want to use this to increase the I.Q.of their child, or maybe to change the hair col-oring, or the eye coloring; or”—get this—“theskin coloring, or to add height?”

• Gene Therapy. Gene therapy has been disap-pointing so far, but later on, it will be more suc-cessful. If you can do gene therapy and solvethe problem of cystic fibrosis, who could beagainst that? Yet where do you stop? Where dogene therapy, genetic manipulation, and geneticengineering stop? How do you stop short ofeugenics?

• Rationing of Care. There is simply too muchneed in America, as long as you define “need”

broadly—not just critical need, but non-criti-cal need, elective need, cosmetic need, andhypochondriacal need. The needs greatlyexceed what we could possibly deliver in termsof the resources required to meet them. There-fore, there will be rationing. There will besome form of “managed care.” There will besome medical priorities that have to be estab-lished. Who is going to decide what kind ofrationing system we will have? Who is going todefine exactly who gets the care and whodoesn’t? I think that kind of decision is muchmore sensitively handled if it is in a voluntary,private, faith-based scenario.

• Creating Life. This is no joke. Some research-ers are attempting to do this with single-cellorganisms of 350 genes: They are attemptingto create life.

• “Post-human” Species and Transhuman-ism. “Post-human” species are being talkedabout, and it will probably happen. There wasa major 2003 conference at Yale University,and the closing keynote address for the “Tran-shumanism” conference was, “Who’s Afraid ofPost-Humanity? The Politics and Ethics ofGenetically Engineering People.”

• Transgenic Species and Chimeras. Research-ers have already mixed pigs with humans,and sheep with humans. The reason they aredoing this is to try to create a species to beused for transplantation. You could use the“pig” liver, for example. They found somevery interesting results. They had sometotally normal pig cells, some totally normalhuman cells, and the others had very strangemixtures of DNA—human and pig together.Incidentally, they also speculated that thismight be an entry point for some viruses,such as HIV.

• Germ Cells. These will change the geneticsand the genetic pool of the human species thatfollows.

• Reproductive Options. There are now 25 dif-ferent ways to make a child. Just recentlyresearchers created an embryo without anymale genes whatsoever.

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• Resurrections from the Dead, or GivingBirth to Yourself. A bull in Japan sired350,000 calves. They decided to clone thisbull. They made six clones of this bull and oneof the clones has now been cloned. Now youhave some immortality. If bulls, why nothumans?

I think you have a sense that we are on thethreshold of a whole host of cascading ethicaldilemmas. We need consensus at a time in whichwe really do not have national consensus. In themeantime, the practical impact of these issues onour personal lives would be much better handledif it were done in a situation in which each personcould affiliate with an affinity group that wouldcarry their own insurance. They could have reli-able bioethical standards.

MICHAEL O’DEA: I have been in the health carebusiness for 34 years. What we pay for is what weget in health care, and I am going to demonstratethat. I want to go back to 1987. That is when I actu-ally got involved in this struggle. My wife and I runa pregnancy center. I have done a lot of work withyoung teenagers who find themselves pregnant.

Through counseling one young lady, her momtold me that financing was not a problem, becausewhether they had the baby or whether it wasaborted, their insurance would pay for it. Itknocked me out of my seat when I heard that.From that day, I have been trying to find out whyour health plans are subsidizing and promoting aculture of death.

When I started my work, some people I ran intoin Chicago handed me a health plan that theNational Organization for Women (NOW) puttogether. In this health plan information, there wasdata showing that NOW testified before Congress infavor of an “economic equity” act for women. In thisproposed plan, there was coverage regardless ofmarital status or sex, coverage for elective abortions,and coverage for surgical and non-surgical birthcontrol. If we just think about that today, that hasbecome the standard health plan in our country.

The current health care culture was shaped bythe Alan Guttmacher Institute, along with part-

ners in the private industry, government, andinsurance industry. Their objective was to haveabortion services, contraceptives, sterilization,and infertility services included in regular healthinsurance and they have accomplished a very sig-nificant part of this.

The Loss of Parental ControlIn 1993, we entered a great debate about health

care reform under the Clinton Administration.There was the push for national health care. Yeteven back in 1993, 86 percent of all types of typi-cal plans routinely covered tubal ligation and atleast two-thirds covered abortion services whenconsidered “medically necessary or appropriate”by the health care provider. If you look at the dataon health maintenance organizations (HMOs),they are more likely to have billing and claims pro-cessing procedures that allow spouses and non-spouse dependents, such as teenagers, to obtain“confidential” reproductive health service. As earlyas 1993, between 64 percent and 71 percent ofHMOs were already providing “confidential” abor-tion coverage. You can imagine how that hasundermined parents and the impact it has had oncorrupting our children and destroying the family.

Analysts at the Alan Guttmacher Institute thensaid that this coverage for abortion and other such“confidential” services was uneven and unequal.They said that it was not enough. There should be100 percent coverage for all reproductive services,all dependents, and at any age—and no parentalinvolvement in it. You had preventive programswithout deductibles and co-pays to assure that“confidentiality”; therefore, parents or spousescould not be even involved in the process.

The Clinton Administration, of course, wantedto require abortion coverage in its proposednationalized standard health care plan. As we allknow, that 1993 Clinton health care reform pack-age did not pass. Yet a couple of years later, Presi-dent Clinton said that incrementally we are goingto accomplish the same thing. In 1996, the ana-lysts at the Alan Guttmacher Institute went backand developed a whole new plan to incrementallyachieve national health insurance with these confi-dential “reproductive” services.

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The first program was the State Children’sHealth Program (S-CHIP). Now, I do not object tothe State Children’s Health Program. Congress,when they passed that legislation, imposed nolegal requirement for abortion for any reason.There was no requirement for contraception orsterilization. However, when it was rolled outacross the country, every state except Pennsylvaniacovered abortion and contraception. In my state,they offered sterilization. I do not know how manyother states offered sterilization. Yet rememberthis: This is all “confidential coverage” to childrenunder 19—without parental knowledge.

Religious organizations, particularly Catholichealth care providers, are encouraged to implementhealth plans that provide these procedures. Theyare establishing bypass arrangements to remain anarms-length away from cooperating. In order toaccomplish this, they hire a third party to collect thepremiums so they do not have any direct involve-ment. Yet they are still getting the money to pay forthese procedures by having a third party collect thepremium and distribute the necessary funds to theproviders when these procedures are performed.Most of the insured in these religious plans are notaware that these procedures are being funded. Theabortionists know, and because it is kept confiden-tial from parents, they get their money.

Government MandatesNext, we had the 1997 Equity in Prescription

Insurance and Contraceptive (EPICC) mandate—contraceptives in the Federal Employees HealthBenefits Plan (FEHBP). That was the real begin-ning of the political push for contraceptive man-dates throughout the country. To date, 21 stateshave contraceptive mandates. Keep in mind, whenwe talk about contraceptive mandates, we are talk-ing about “confidential” coverage to children ofany age in this process. One thing to note aboutthe federal contraceptive mandate for federalemployees is that there was a “conscience” exemp-tion in it. Very few states have conscience exemp-tions, and the states that do have ineffective ones.

Then we have the Health Insurance Portabilityand Accountability Act (HIPAA). Proponents ofreproductive rights had as a goal to ensure “confi-

dentiality” to children, particularly to vulnerablepopulations, such as Medicaid recipients. Initially,HIPPA, under the Clinton Administration, deniedparents medical information about their minor chil-dren. In April of 2001, Secretary of Health andHuman Services Tommy Thompson announcedthat President George W. Bush was revising HIPPAto assure that parents would have access to informa-tion about the health and welfare of their children.

I mentioned the S-CHIP program, which wasrolled out across the country in 1998, to beadministered in the states. Let me tell you whathappened in Michigan. Initially S-CHIP (knownstatewide as MIChild) offered abortion, steriliza-tion, and contraception (which included chemi-cals and mechanical devices that induce abortion)available without parental consent or knowledge.We did remove mandatory sterilization from ourplan, and we also removed abortion for rape andincest. Now people say, “You cannot have abor-tion. The federal government will not allow that.”Although not required by the federal government,S-CHIP offered abortion for rape, incest, and sav-ing the life of the mother, which is the only type ofabortions federal funds can be used for. I can tellyou from my work with pregnant moms that thecategories of rape and incest are so manipulatedthat it is difficult to prove, in most cases, thatwomen were not raped. Insurance companies inMichigan, if they wanted to participate in S-CHIP,had to agree to participate in these procedures.

In 1997, Planned Parenthood started pushing theidea of nationwide contraceptive mandates basedon the idea that employers and insurers would savemoney. On an economic basis, the contraceptive pillcosts about $300 a year—one birth, about $4,000.In October of 2000, the Associated Press reportedthat major national insurance companies said theywould cover RU-486. For those of you that do notknow what RU-486 is, it is a drug that women takewhich causes them to abort the child. Health insur-ers have generally agreed to cover this newlyapproved procedure, which is, again, available tochildren without parental knowledge and is verydangerous. The Equal Employment OpportunityCommission (EEOC) ruling of December 13, 2002,about contraception spurred further momentum for

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employer-paid contraception and nationwide con-traceptive mandates.

Practical SolutionsWhat can we do to redirect what we finance in

health care? We now have Health SavingsAccounts (HSAs) available that really empowerindividuals to become more directly involved intheir health care. HSAs will also enhance the rela-tionship between physicians and patients, whichwe so desperately need.

Therefore, we need to start developing newhealth plans that use this new benefit, and thatdeal with both the moral and economic crises inhealth care. We can immediately implement a newhealth plan by individually underwriting it,administering it, and passing the risk on to a largeinsurer (a re-insurer).

I propose that faith-based organizations (e.g.,the Christian and Catholic Medical Associations,the Knights of Columbus, Christian ManagementAssociation), with the assistance of health insur-ance experts, test the market in a limited numberof states that would be the most favorable to a freemarket, faith-based individual health plan. Theycould then expand marketing to other states andfaith-based organizations. After a large pool isformed, faith-based organizations can establishtheir own health insurance companies to takerisks, experience rate, underwrite, and administerin those states.

Let me outline for you the major criteria for theestablishment of nationwide, faith-based, and self-insured health plans.

First of all, we have to have a health care planthat is totally committed to spreading the Gospelof Life. The question is: Do people of faith reallyhave the will to actually step forward and do this?

Next, you need critical mass. Anybody whoknows the insurance business knows it is all aboutthe spread of risk. It is out there among faith-basedcommunities. They just have to have the will topool that critical mass together. The plan design iskey, and the plan design must be truly in line withthe beliefs of the faith-based organizations. Theymust also make sure that they control health plan

administration. The problem in health care todayis that people really do not know what is in theirhealth plans, and many times they do not evenknow what is being paid for—particularly when itcomes to issues regarding abortion, contraception,or sterilization. That is all kept “confidential.”

Somebody needs to be willing to take on therisk. There are numerous people that would takeon that risk in the industry—as long as they had acommitment of the critical mass. Conscience andparental rights must be protected in law.

In Michigan, four bills are pending that havepassed through the U.S. House of Representatives.At the federal level, the Abortion Non-Discrimina-tion Act has now passed in the House. It awaits Sen-ate action and a presidential signature. In the interestof freedom, policymakers should oppose newEPICC contraceptive mandates (and reverse the pas-sage of the current mandates); reform S-CHIP, Med-icaid, the EEOC ruling on contraceptive mandates,and HIPAA; and enact parental consent laws.

The President’s ProgramThere are different programs that President

Bush has proposed in his State of the UnionAddress that are critical for the establishment offaith-based health plans.

First, it is taking care of the uninsured by mak-ing sure they have some economic fairness in themarketplace. President Bush wants to see thateveryone gets treated the same with tax dollarswhen purchasing health care, as most Americansdo now through their employers. He also wants tosee the uninsured get tax credits so that they canafford to buy insurance.

Second, the President favors association healthplans. This legislation would preempt the 21 statesthat have mandated contraception, because associ-ation health plans will be self-insured plans underthe guidance of the Employee Retirement IncomeSecurity Act.

A final comment about HIPAA: President Bushdid come out very strongly against the way HIPAAwas set up under the previous administration.HIPAA language said that parents no longer hadthe rights to their children’s medical information

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unless the child consented. President Bush wentpublic and said that he was going to change that.He said all parents will be protected and have theright to their children’s medical information.

The real problem with HIPAA is that PresidentBush did not change what was happening at thestate level: States have taken that right to medicalinformation away from parents, so parental rightsis a state-to-state battle. The other major battle thatmust be fought about HIPAA is to reverse the fed-eral mandate that no longer requires authorizationfrom patients for the release of their medical infor-mation to insurance companies and governmentalorganizations

It is ironic to me that we have patients’ healthprotection, when, in fact, the government and theinsurers can get the information without anyauthorization. People think that they are beingprotected under this law. We really have got a lotof work to do in this area to awaken America.

DR. ROBERT E. MOFFIT: The most importantissues in health care today are personal freedomand the preservation of human dignity. If you lookat what is really frustrating many doctors andpatients throughout the health care system, it isthe loss of personal or professional control overkey decisions in an increasingly bureaucratizedsystem. Likewise, a biomedical science unre-strained by traditional morality, as Dr. Swensonindicated, threatens—in a very profound way—human dignity.

Doctors are constantly finding themselves onthe receiving end of decisions made by third-partypayment, whether it is Medicare, Medicaid, or pri-vate insurance. Patients, more than ever before,find themselves in a situation in which the privacyof their medical records, the range of treatmentoptions available to them, or (as our panelists havepointed out) the very morality of certain medicalprocedures that they are required to finance, arethings over which they have little or no control.

The absence of personal control is rooted inthe structure of the insurance market; and thestructure of the insurance market, in turn, isrooted in the tax treatment of health insurance.

The unfairness in the existing tax treatment ofhealth insurance, which Mike O’Dea alluded to,creates an unlevel playing field and thus compro-mises personal freedom—including the freedomto choose a health plan that is compatible withyour ethical, moral, or religious convictions. Weprovide $188 billion each year in tax relief for thepurchase of health insurance, as long as you get itthrough the place of employment. This meansthat as long as you get your insurance throughyour employer, and your employer makes all ofthe key decisions with regard to your health careplan, you get tax relief. Yet if you are working fora firm that does not offer you health insuranceand you tried to buy a faith-based health insur-ance plan on your own (without the employer’ssponsorship), you would get no tax break. Thereis a profound unfairness in the tax treatment ofhealth insurance.

The recent enactment of health savingsaccounts is a welcome change in the tax treatmentof health insurance. It is a start in the right direc-tion. Yet there is much more to be done in trans-forming the conventional health insurance marketinto a system that is consumer driven and genu-inely competitive.

Finally, we are plagued by the growing bureau-cratization of health care delivery, the growth inadministrative cost, and the growth of regulation,red tape, and paperwork requirements—particu-larly for physicians. This is contributing to a dan-gerous demoralization of the medical profession. Iwill repeat it: This is contributing to a dangerousdemoralization of the medical profession.

Not one of you can go to a medical meeting or aprofessional medical association meeting and notfeel (tangibly, on the part of physicians) the sensethat they are overwhelmed by what they have todeal with in Medicare, Medicaid, and privateinsurance. Now they are increasingly faced withgrave ethical problems as well; questions of notonly what they can or cannot do, but also whatthey should or should not do. I will just mention,for example, the recent pressures on future obste-tricians and gynecologists to participate in abor-tion procedures as part of their medical education.The very suggestion would have been scandalous

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not many years ago. Now, it is actually somethingthat is somehow legitimate, if not routine. Somuch for the Oath of Hippocrates.

The Way ForwardFederal tax policies largely shape the health

insurance market. All roads to real health carereform ultimately lead to the reform of the taxcode in the health insurance system. A simple syl-logism: If you want to reform the health care sys-tem, you have to reform the health insurancemarkets. If you want to reform the health insur-ance markets, you must reform the tax treatmentof health insurance. You simply cannot get to aconsumer-driven, patient-centered system, whichallows for the creation of faith-based health plans,without such a change. Period.

What is wrong? The current tax treatment under-mines the affordability of health insurance andrestricts consumer choice because the insured per-son has nothing to do whatsoever with the policy.The employer owns the policy; the consumer doesnot. It hides the true cost of health care. Actually,many people do not know what they are paying for.As Mike O’Dea pointed out, Americans are payingfor all kinds of things they would never pay for ifthey actually had to make that transactional cost.

The current system fuels the rapidly risinghealth care costs that Dr. Swenson noted, becauseit encourages employees to seek more comprehen-sive and expensive benefits because those benefitsare tax-free. It favors those who have highincomes. If you are upper income and you workfor a large corporation, you get a big chunk of tax-free income as a result of the current tax treatmentof conventional health insurance. If you work for asmall firm with a smaller benefits package, you donot get such a big tax break. If you are a worker ina small firm without insurance coverage, and youtry to buy health insurance on your own, you getnothing. Basically, upper-income people do justgreat under the current system; lower income peo-ple do not. Again, for most of you, if you do notget insurance at the place of work, and you try tobuy health insurance on your own, you are introuble. If you are looking for a faith-based healthplan, forget it.

What are the needed tax changes? First andforemost, a health care tax credit, preferablyreplacing existing tax breaks. A health care taxcredit system would be portable, and it could beuniversal or targeted. Several years ago, my col-leagues at The Heritage Foundation, Stuart Butlerand Edmund Haislmaier, developed a comprehen-sive and universal health care tax-credit system,and that plan became the basis of major legislationintroduced in 1993 in the House and Senate.Twenty-five senators co-sponsored the legislation.Today, President Bush is proposing a more targetedtax credit, aimed at individuals and families with-out workplace health insurance. In any case,whether policymakers adopt a comprehensive or atargeted approach, that is, frankly, a matter ofpolitical prudence.

Yet the basic policy is simple enough: Give tax-paying citizens direct assistance, in terms of taxrelief, for the purchase of insurance or medical ser-vices, or give vouchers to low-income people tooffset the cost of insurance. My preference wouldbe to extend this direct assistance to offset out-of-pocket medical costs and help expand access tohealth savings accounts. If we are going to haveneutrality in the tax code, the tax treatment shouldapply to all of these health care options, includingnew options sponsored by religious institutions orfaith-based organizations.

Policymakers will also have to set some condi-tions. If you are going to establish tax relief forinsurance, the insurance should be real insurance,and that means it should cover you for catastroph-ic events. My own preference is that the size of taxcredits should be based roughly on need. All indi-viduals or families would qualify for a basic credit,but beyond a basic credit, you could vary its sizeaccording to income or health care needs. In otherwords, if you are lower income, and you havehigher health care costs, policymakers may wantto vary the credit amount accordingly, making itmore generous. The more persons covered underprivate health insurance, the less dependencethere will be upon government health or welfareprograms. You would also have to make insuranceand regulatory reform changes compatible withthe new health care tax credit system.

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The Creation of Faith-BasedHealth Plans

Let’s think big. What if you did have universal taxcredits, as opposed to the disjointed system that wehave today? How would it affect the insurance mar-ket? How would it affect the subject we are discuss-ing today—faith-based health insurance plans?

Think about this. You would have a genuinediversity of health options on a national or region-al level. You would have a wide variety of healthinsurance options—associations, fraternal organi-zations, plans sponsored by unions and trade asso-ciations, as well as ethnic organizations andreligious and faith-based institutions. Atheists, too,could have their own association plan. You wouldhave a real diversity of plans and options, increas-ingly tailored to personal needs and values—including ethical, moral, or religious values. Youwould also intensify the demand for informationabout quality and, on the basis of that information,you would also intensify the level of competitionthat is most desirable—the competition amongdoctors and hospitals themselves in the efficientdelivery of high-quality care.

Second, with a national tax credit system, youwould have the creation of large, national pools forpersons employed in large companies. Indeed, akey structural benefit of a national tax credit sys-tem is that it would lay the groundwork for largenational pools. Think about the possibilities forfaith-based institutions. Imagine the possibility ofa large national pool—let’s say, the Southern Bap-tist Convention, which has 17 million members,sponsoring health insurance. Imagine that kind ofa pool.

If you start to include the millions of uninsuredin these national pools, you are going to introducea downward pressure on average claim costs. Weknow a lot about the uninsured. We probablyknow more about the uninsured than we knowabout any other group within the population. Wecan count the hairs on their heads. They have beenstudied to death, not only by my colleagues at TheHeritage Foundation, but also by researchers at theKaiser Family Foundation, the CommonwealthFund, and the Robert Wood Johnson Foundation.

The uninsured are not well off financially, but, as agroup, they are fairly healthy. So, as a group, whenyou start to include them in the insurance pool,you will start to drive down average claims costs.

Finally, you will have a long-awaited revolutionin consumer relations in the health care system.Right now, you get what your employer gives you.(In the case of government programs, like Medi-care or Medicaid, it is what Congress or civil ser-vants say you will or will not have.) The insurancecompany is an agent of your employer, not you.But this new set of tax and insurance proposalsfacilitates a major change in the entire relationshipbetween you and your health insurance company.You own the policy, not your employer. Youbecome the principal, and your insurance compa-ny becomes your agent. Once you start establish-ing this kind of relationship, carriers have apowerful incentive to retain your business. Youwill start to see the writing of long-term healthinsurance contracts, accompanied by a powerfuleconomic incentive on the part of insurance com-panies to keep you healthy as long as possible. Inthe meantime, you will be able to access increas-ingly sophisticated information, not only about thehealth benefits, quality, and service of your insur-ance plan, but also about the performance of doc-tors, hospitals, and clinics retained by your plan.You can expect, with the rapid and continuingexpansion of information technology, for all of thisto increase.

Back to the Future? When it comes to faith-based insurance plans,

are we talking about something that is unrealistic?Not at all. Sue Blevins, President of the Institutefor Health Freedom, recently sent me a bookcalled The Fraternal Insurance Compend of 1926,which is relevant to our topic.

What a lot of us in the policy community haveforgotten is that, in the late 19th and early 20thcenturies, when it came to insurance—old age,disability, dismemberment, and sickness bene-fits—there were numerous fraternal societies inthe United States that sponsored insurance andsocial services, and they covered millions of Amer-icans. Many of these were faith-based organiza-

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tions. My personal favorite is an interesting groupcalled the Bohemian Roman Catholic Union ofTexas, serving men of Bohemian birth and descent.Their total insurance was valued at $3 million in1925 dollars.

There were many other faith-based groups, pro-viding similar services: the Aid Association forLutherans; the Catholic Aid Association of Minne-sota; German Baptist Life Association; the Inde-pendent Order of Brith Shalom; the IndependentOrder of the Free Sons of Israel; the LutheranBrotherhood; the Polish Roman Catholic Union ofAmerica; and the Slavonic Evangelical Union ofAmerica.

None of this is fanciful. America was once richwith such institutions. They were flourishing.America is, as Alexis de Tocqueville observed, anation of “joiners.” We still are today. With thechange in the insurance market, coupled with the

proposed change in the tax code and the establish-ment of equity in the way in which we deal withhealth options, we could revive similar institutionsin an increasingly diverse 21st century America,with the possibility of uniting health insurancewith the faith-based health care delivery. Thinkabout that.

One more point: Today, Roman Catholics, Luth-erans, Seventh Day Adventists, and Jewish organi-zations already have many sophisticated hospitalsystems throughout the United States. One of thecriticisms of the current health care system is thatit is often disjointed, and that there is often a dis-connect between the existing systems of financingand continuity—a lack of coordination that com-promises the provision of quality in the care ofindividual patients. As many of you know, some-times on the basis of painful personal experience,these criticisms are often correct.

Faith Based Plans: Back to the Future?Aid Association for Lutherans (1902).

Offered sickness and disability benefits; 45,000members; open to male and female members ofthe Lutheran Church; total insurance in force:$47 million.

Bohemian Roman Catholic Union of Texas(1877). Offered life insurance to men of Bohe-mian birth or descent; total insurance in force:$3 million.

Catholic Aid Association of Minnesota(1878). Offered life and disability benefits tomen and women; total insurance in force: $12.5million.

German Baptists Life Association (1883).Offered life, accident, disability and dismember-ment benefits to German Baptist men and wom-en; total insurance in force: $2.3 million.

Independent Order of Brith Shalom(1925). Offered life and old age benefits toHebrew men and women; total insurance inforce: $11.7 million.

Independent Order Free Sons of Israel(1871). Offered life, old age, and disability ben-efits to Hebrew men ages 18 to 50; total insur-ance in force: $5.1 million.

Lutheran Brotherhood (1917). Offered life,disability and death benefits to Lutheran men andwomen; total insurance in force: $9.3 million.

Polish Roman Catholic Union of America(1887). Offered life and survivors benefits toRoman Catholic men and women of Polish birthor descent; total insurance in force: $61 million.

The Roman Catholic Mutual ProtectiveSociety of Iowa (1879). Offered life and old agebenefits to Catholic men and women; totalinsurance in force: $4.3 million.

Slavonic Evangelical Union of America(1896) Offered life insurance to Evangelical Slo-vak men and women of the Augsburg Confes-sion; total insurance in force: $8.7 million.

—From The Fraternal Insurance Compend of1926.

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By making key changes in health care tax policyand regulation and by aligning the economicincentives correctly, we can promote a powerfulintegration, a real and effective integration ofinsurance and delivery systems. We could have anatural marriage of private health care deliveryand private health insurance, of large pooling andpersonal freedom, and a commitment to qualitycare combined with adherence to traditional ethi-cal, moral, and religious values. What could bebetter?

Question and Answer Session

QUESTION: Could there be a problem now withhomosexual marriage taking place? I’m wonderingabout a group like the Metropolitan CommunityChurch, which is geared specifically towardshomosexuals. They might be a much greater riskfrom a scientific or medical viewpoint: Could therebe discrimination there?

RICHARD SWENSON: I don’t think discrimina-tion is really the issue there because you wouldopen enrollment, and people would have volun-tary choice about which health plan they wouldsubscribe to.

For example, the Southern Baptists might serveas a good illustration. Today, 175 million Ameri-cans get their insurance through their place ofemployment. If, all of a sudden, instead of adefined benefit they had defined contribution (theemployer gives you the money and you shop your-self), every person would shop according to theconfiguration of his or her needs.

Therefore, the Southern Baptists could cometogether. Maybe 5 million out of 16 million woulddecide to get their insurance through the SouthernBaptists, and they would set it up the way theywant to set it up. Catholic groups would do that.The Sierra Club could do that. You could have anykind of group that could do that. Therefore, peo-ple would have a wide range of choices and theywould obviously choose a program in which theyare not discriminated against. I really do not thinkit is an issue of discrimination.

QUESTION: This question is primarily for Dr.Swenson. You mentioned that different groupscould make their own decisions on the really con-troversial issues. If one group makes very radicaldecisions for its own members—say, one groupdecides in favor of abortion, human cloning, andstem cells—how would that keep other groupsfrom saying, “Well, we believe that is wrong, andwe do not think you can choose those things?”

If another group decides to support abortion,and I do not agree with that, I just have to say,“Well, they just have it for their own group. I can-not do anything about it.”

RICHARD SWENSON: You would basically havea two-track approach. If you wanted to just look atpolitics, morality, or the national discussion, youwould do that using a two-track approach. Onewould be a track in which each individual wouldbe able to opt into the program that fits his or heraffinities, that fits his or her moral beliefs and thetenets of his or her faith. That would be very com-forting to me to have such a system: I could exam-ine it, and decide that this is the plan or programthat matches up very well with my own con-science on these particular issues.

The second track is where you continue on witha national debate about these particular kinds ofissues. The federal government will still have a role;the state governments will have a role; the SupremeCourt will have a role. Just because one group onthe side should decide things that are scandalousfor the entire nation does not mean that we wouldnot have some kind of national debate about that. Itis best to look at a two-track process.

If you do not allow individuals the opportunityto go where their affinities are, and you have insteada single-payer system, then you have no option. Youhave to belong to something. Politicians will passdifferent laws that will be contested, and this will bevery frustrating for certain faith groups.

I do not care what faith groups you are talkingabout. No matter if you are way off to the right,way off to the left, somewhere in the middle, or onthe planet Mars. You will have a law that will comedown that will alienate you. Therefore, it will serve

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only to increase the level of cultural and politicalconflict in America.

MICHAEL O’DEA: This whole public policy inhealth care is not just government policy. It is policythat has happened in the private industry. Peoplewill come to me and say, “Mike, I just don’t thinkyou are right. Most health plans are not paying forabortion. Mine doesn’t. Look. Here is this exclusionthat says we do not pay for elective abortion.”

Well, “elective” does not have any definitionwhatsoever; neither does “voluntary” or “medicallynecessary.” A lot of people just do not know. Theyreally believe that they are not paying for abortion. Ibet if you were to survey most Americans, and theyhad a choice between a health plan that did not payfor abortion and one that did, I think, overwhelm-ingly, they would not want to pay for it in theirhealth plan. If you surveyed them, they overwhelm-ingly do not know that they are paying for it. It issomething that has been done behind the scenesand all that information is being kept confidential.That is happening with a lot of areas of health care.

QUESTION: The Lutheran Brotherhood and oth-ers have combined. I think it is called “Thrivent.”Is that a good example of the kind of approach youhave in mind? Do any of you have any other primeexamples of what is going on right now?

RICHARD SWENSON: Personally, I don’t look attransitional models. I look at post-paradigm mod-els. The paradigm we have now is not sustainable—it is going down. Once it goes down, which way ishealth policy going? It will go to either single payeror something else. So that is what I look at.

When you try to do “transitional” models thatbridge “here” and “there,” you must realize that welive in such a destabilized and hyper-volatile timethat, no matter what system you invent, it is goingto have conflict on many different fronts.

I do not spend a lot of time, therefore, looking attransitional models. I am looking ahead to the timewhen the paradigm indeed changes. It will change,I think, quite dramatically. The reason I think it isgoing to change in the consumer-choice, consumer-

driven, defined-contributions direction is becausewe are the only country in the world that has a sys-tem that is employer-based. That started in WorldWar II and there are historical reasons for it.

Employers cannot wait to shed costs that theyhave no control over. They have to do somethingabout it. They will be the change agents. I do notthink it is going to be the federal government. I donot think it is going to be physicians or hospitals. Ibelieve it is going to be corporate America. Oncethey figure out there is a way to change this that ispolitically acceptable (so they will not get somekind of horrible political and public relationsblack eye out of it), then I think the change isgoing to happen very quickly. That is a post-para-digm model, such as defined contributions. Thereis no exact post-paradigm model that exists now,because we are not post-paradigm yet.

ROBERT E. MOFFIT: I want to follow up on thisa bit. The basic question is: Where are we going?

Right now, there are services that are being deliv-ered through religious institutions. Black churchesin the inner city, for example, have health-screeningprograms. They are going on right now. Among Afri-can-Americans, the rate of cardiac disease is roughlythree times the rate of cardiac disease among thewhite population. Among Mexican-Americans, forexample, there is a very high rate of diabetes. Theconsequence is that there have been a large numberof amputations in the Mexican-American communi-ty because of diabetes. They were not getting thebest care for a variety of reasons, including culturalbarriers and problems communicating with doctors.Minority populations, particularly when they aredepending upon conventional employment-basedinsurance or government health programs, oftenfind that the existing institutions do not make allow-ances for ethnic differences or disease patterns.

The question is: How could you build a healthcare system that would be more effective inresponding to these kinds of demographic differ-ences? This means responding in the right way,with the right care, and at the right time. It meansresponding in such a way that you will not incureven more massive costs down the road, throughMedicaid or other government programs.

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Black churches readily come to mind, becauseyou have here a social institution in which there is agreat deal of affinity, emotional attachment, andauthority. That is to say, members perceive that theinstitution is legitimate and what is being said tothem is important and sincere: “You will have vacci-nations. You are going pursue a wellness program.You are going to control your blood pressure. Wecare about your health and well-being.”

If you were to tie that social authority to a newsystem, a consumer-directed system in which theblack church would be in a position of evaluatinghealth plans for that community, you would have amajor breakthrough with an intermediary organiza-tion to do this kind of work. This function wouldlikely be the norm in a patient-centered, consumer-directed system. Right now, you have an organiza-tion called the National Association of Retired Fed-eral Employees. They annually rank private healthplans for retirees in the FEHBP. They evaluate theseplans according to their ability to deliver certainkinds of medical services for disease conditions thatare prevalent among retired Americans. There is noreason why faith-based organizations or ethnicorganizations could not do something similar fortheir own members.

That is the kind of role that faith-based institu-tions can play in a revitalized, consumer-directedhealth care system. It is a role that they are not play-ing now—health insurance companies being ratedby religious institutions or ethnic organizations interms of their ability to deliver services to the com-munity in accordance with the moral values of thatcommunity.

QUESTION: Dr. Swenson, you mention that aplethora of biomedical and ethical issues arepoised to cascade within the next decade. I havebeen thinking that for several decades already! Yetpublic indignation on a lot of these issues seems tobe declining. People become more accustomed tothings that used to shock them. Do you have any-thing more encouraging than hope for me?

RICHARD SWENSON: Dr. Edmund Pellegrino ofGeorgetown University is here. Dr. Pellegrino, may

I call upon you? I’m very glad that you are in theaudience today. I believe you are the foremost med-ical ethicist in the United States during the past 50years. I know you are concerned with the doctor-patient relationship. You are concerned about themanaged care issue. You write often from a vantagepoint of faith. You know more about the ethicalissues and the conundrums than anyone else.Would you want to take a minute or two and saysomething about these issues? You might disagreewith everybody up here. Personally, I think some-thing fundamental has changed, and we are facinga plethora of imminent bioethical challenges.

DR. EDMUND PELLEGRINO: I want to congrat-ulate you on dealing with one of the major ethicalproblems with the current health care system very,very well.

I work in ethics. I am a physician. I work in thefield of ethics and I am as concerned as you areover the fact that ethical issues are now being set-tled in the public realm by the courts, and, ofcourse, in the marketplace, in the way you haveindicated.

I would have questions about whether oneneeds to link the avoidance of those particularproblems with the particular system that you pro-posed—an economic system. I think that is anopen question. I would be prepared to discuss onother occasions ways in which it might be done ina different way.

Finally, the question running through my mindover and over again is the recurrence of the phrase“market-driven.” This concerns me because I havewritten on the commodification of health care, andI am concerned about that. The second question iswhether there can be true freedom on the part of apatient seeking help when he or she is in the mid-dle of illness—or, when you are not ill, the possi-bility of your projection into the future of whatyou will, in fact, need.

Therefore, I question not just your plan, but anyplan, or whether a consumer can really be educat-ed. I do not like the word “consumer.” Yet I dowant to applaud what you are doing in trying toget us out of this terrible morass. I also agree with

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you very, very definitely that the medical profes-sion is totally demoralized. I have been in it 60years, and I have never seen it this way before.People are cynical about physicians. Yet I think itis because we feel we cannot do for patients whatwe think they need. I have just stepped out of myclinic because I feel I cannot provide what thepatient needs. That is another moral issue. What isthe moral status of our ability to provide for thosethat are ill in this country?

RICHARD SWENSON: I believe this is a specialmoment in history. This is not like 1960. This isnot like 1975. This is not like 1990. This is 2004.The scientific ethical issues are there, they areoverwhelming, and we have to start dealing withthem. I do not think we have a national consensusabout how to deal with them. Therefore, I thinkthey are better dealt with on an association planbasis as opposed to a one-size-fits-all national gov-ernment system. That is all the hope I can provide.

MICHAEL O’DEA: I just wanted to make a com-ment, because I have been following this andworking in this area for years. I totally agree withDr. Swenson. I think we are at a moment in timewhen we are going to go one way or the other. Thedecisions will be made in this decade.

One of the things that really has got people start-ing to think about this—how our personal libertiesare being taken away from us in health care—is thatrecent California ruling about the Catholic church.They are being told by the courts in California thatthey must violate their religious convictions by themandating of contraception in their health plan.That has awakened a lot of people.

The moral issue is going to move people evenmore than the economic issue. Both of them togeth-er are at a crisis. People are starting to recognize it.That is why I think the moment for change is now.

QUESTION: In the early 20th century, you had arich, vibrant civil society, with all the different fra-ternal organizations, and other helping groups.People went to those institutions because that waswhere you could get some help. Then we got the

great protectors, the state and the federal govern-ment, which said, “We are the insurer of lastresort, or first resort, and we will take care of you.”The older organizations were “crowded out.”

More recently, efforts to expand civil societyhave run against another problem: Getting intobed with the government begins to change thevery nature of what you are supposed to be doingin its pure form. You are more of a vendor or apartner of the state, rather than the kind of institu-tion that enables you to do what you do best.

In structuring the type of future system you aretalking about, what underpinnings are needed inorder to allow these types of faith-based plans tooperate? What makes them work best, as opposedto being kind of a pale imitation of what might seemto be, in effect, a non-profit, faith-based sector?

ROBERT E. MOFFIT: That is a tough challenge.Unlike the current system, which is largely a third-party prepayment system through employers, Ifavor direct individual assistance—whether it isindividual health care tax credits, or vouchers, ordefined contributions—simply because it maxi-mizes the freedom of the person. Individuals makethe key decisions in the system.

You are never going to get the government com-pletely out of health care. That is not going to hap-pen. Even when it comes to health insurance, aninsurance system is not going to work unless thereare common ground rules for all the players. Thatis the job of government. Meanwhile, however,you have got to maximize personal freedom.

You are right. These older fraternal institutionswere indeed “crowded out.” They were “crowdedout” by the transformation of the American econo-my, the growth in employer-based health insurance,and a variety of other social, economic, and politicalchanges. In this context, I was talking to Phyllis Ber-ry Myers earlier about the black fraternal organiza-tions. It is an incredible story. Dave Beito, aprofessor of history at the University of Alabama,has written about this story, and the stories of othersuch organizations, in a book entitled From MutualAid to the Welfare State, a remarkable study of frater-nal societies and social services from 1890 to 1967.

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Professor Beito writes, for example, about theOrder of the Twelve Knights and Daughters ofTabor, or the Taborites, a black religious fraternityvery prominent in the South. They built hospitalsbecause the public hospitals in the South were seg-regated, and the quality of care for African-Ameri-cans was so poor in public hospitals that it was acrying necessity. To paraphrase their message: “Weare living in a hostile culture. This culture does nottreat us fairly. With the help of God—literally—weare going to chart an independent path.” Therefore,the Taborites built hospitals. It was an impressiveachievement. It was also a declaration of social andeconomic independence from an aggressive, hostile,segregated state. The Taborites’ story, as the story ofother fraternal societies, constitutes an inspiringchapter in American social history.

RICHARD SWENSON: Earlier, I was asked aquestion about hope. I do not think I have givenan integrated answer. I have a lot of hope for a postparadigm health care system—for three reasons.

First, if this system goes to a defined contribu-tion approach, you have first dollar decision-

making by the patient. Doctors have beenscreaming for that for as long as I have been inmedicine, which is 34 years. They have been say-ing, “Patients must have more upfront responsi-bility about spending their money.” That is amajor corrective.

Second, for those of us in a faith-based alliance,if we were to join an insurance program alignedwith that, there would be additional savings aswell as wonderful emotional affinities.

Finally, I think the future will see a radicaldemocratization of health care, in which peoplebecome their own primary care provider. Throughthe Internet, for example, you can already order5,000 different kinds of tests you can do on your-self. If you want to check your cholesterol tonight,you simply check your cholesterol tonight.

These are dramatic things. I see a lot of hope.When I speak to physicians, I see a lot of weepingand gnashing of teeth. There is a lot of anguishright now. Yet post-paradigm, positive changecould decompress many of the stressors for almostevery element in the health care delivery system.

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